Synoptic 2 of Starbucks

Introduction.

The US coffee shop industries major players such as Starbucks, Peet’s Coffee, and Caribou Coffee are in the concentrated market whereby these are the top 50 companies that generate more than 70% of sales including more than 20,000 outlet with annual revenue of $10billion in year 2010 (Market Research , 2013).

Starbucks categorized as largest coffeehouse company in US and main player that dominating coffee market (KoKho, 2011). However competitors such as Peet’s and Caribou Coffee are also competitive players in the coffee market. Caribou coffee hold’s the second largest market share after Starbucks and second largest operating stores (Charley Blaine , 2012) whereas according to (Lee Lenker, 2010) Peet’s hold small proposition of coffee market share yet competitive enough as well known for its high differentiation quality of coffee bean used as well for the systematic operating in the market.

The Total Revenue.

The total net revenue of Starbucks has been fluctuating in these 5 years (refer to Graph 1 below) whereby it increase and decrease for the first 3 years from 2007 to 2009. The performance within these 3 years shows significant drops as $363.1 million or 3.9%.

First explanation resulting in drop of total net revenue these 3 years is due to economic crisis which has impact on consumer purchasing behavior as according to (Mathias, 2012) Starbucks is a “income sensitive” consumer products therefore those consumers who have lost their job or fear to lose job might be reducing or change their purchasing style. Moreover, from year 2007 to 2009 there is significant fall on US consumer confident level which was from 61 to 38 (refer to Graph 2 below) shows that consumer less spending especially to high price products like Starbucks. This as well supported by high unemployment rate (refer to Appendix 1) which as according to (Daniel Gross, 2011) show high unemployment of 5.5% in year 2008 which has

However, the total net revenue from year 2010...